Cummins Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2019

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments for the three months ended is shown in the table below:



In millions	Engine		Distribution		Components		Power Systems		Electrified Power			Total Segments		Intersegment Eliminations ⁽¹⁾			Total
Three months ended March 31, 2019
External sales	$	1,984	$	1,993	$	1,401	$	623	$	3		$	6,004	$	—		$	6,004
Intersegment sales	669		8		460		454		—			1,591		(1,591		)	—
Total sales	2,653		2,001		1,861		1,077		3			7,595		(1,591		)	6,004
Research, development and engineering expenses	78		7		75		56		21			237		—			237
Equity, royalty and interest income from investees	56		11		10		15		—			92		—			92
Interest income	4		4		2		2		—			12		—			12
Segment EBITDA	438		171		325		138		(29		)	1,043		(10		)	1,033
Depreciation and amortization ⁽²⁾	50		29		46		29		2			156		—			156

Three months ended April 1, 2018
External sales	$	1,813	$	1,847	$	1,313	$	595	$	2		$	5,570	$	—		$	5,570
Intersegment sales	633		6		440		479		—			1,558		(1,558		)	—
Total sales	2,446		1,853		1,753		1,074		2			7,128		(1,558		)	5,570
Research, development and engineering expenses	79		5		62		57		7			210		—			210
Equity, royalty and interest income from investees	67		13		16		19		—			115		—			115
Interest income	2		2		1		2		—			7		—			7
Segment EBITDA	286		123		227		142		(10		)	768		(68		)	700
Depreciation and amortization ⁽²⁾	49		27		46		30		1			153		—			153

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⁽¹⁾Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended March 31, 2019 and April 1, 2018.

⁽²⁾Depreciation and amortization, as shown on a segment basis, excludes the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Net Income as "Interest expense." The amortization of debt discount and deferred costs was $1 million and $1 million for the three month periods ended March 31, 2019 and April 1, 2018. A portion of depreciation expense is included in "Research, development and engineering expenses."

Reconciliation of segment information

A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Net Income is shown in the table below:



	Three months ended
In millions	March 31, 2019		April 1, 2018
Total EBITDA	$	1,033	$	700
Less:
Depreciation and amortization	156		153
Interest expense	32		24
Income before income taxes	$	845	$	523